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The Justice Department Takes Aim at Big Tech

DOJ Releases a Proposal to Reform Big Tech Legislation

The Department of Justice released a proposal yesterday with the goal of reducing immunity and protection for large tech companies.

The DOJ’s actions come after President Donald Trump signed an executive order last month following Twitter’s decision to attach fact-check labels to some of his tweets. Trump’s EO was designed to review some of the legal protection companies like Google (GOOGL), Facebook (FB), and Twitter (TWTR) have received for over two decades.

Concerns about prior legislation protecting technology companies go beyond Trump and the DOJ’s most recent actions. Updating this framework has been a bipartisan concern for some time, as some members of Congress don’t think old bills reflect the modern environment. Many of the rules and regulations surrounding the companies were created when the internet landscape looked much different than it does today.

Section 230 in the Spotlight

Tech companies are currently subject to Section 230 of the Communications Decency Act, adopted in 1996. This legislation largely protects companies from being legally responsible for what users post and gives them leeway to moderate content as they please.

The DOJ’s proposal aims to review Section 230. It would require companies to provide explanations when they take down content and hold them accountable to their own terms of service around content moderating. It would also increase tech companies’ liability for third-party content on their sites, particularly in relation to e-commerce.

Congress Must Be on Board

The proposal made by the Department of Justice will have to be adopted by Congress.

The Senate seems to be on the same page as the DOJ. In fact, Senator Josh Hawley (R-Missouri) unveiled a bill yesterday called the “Limiting Section 230 Immunity to Good Samaritans Act” that would require companies to revisit and revise their terms of service. It would also open up tech companies to lawsuits over allegations of censoring political speech.

Hawley’s bill applies to platforms with more than 30 million US users per month as well as those with more than $1.5 billion in worldwide revenue. Investors in technology will be watching to see how the DOJ, the Senate, and the House of Representatives approach these impending proposals to roll back protections for big tech.

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